Novo boosted as trial shows weight-loss Wegovy drug has medical benefits

COPENHAGEN/LONDON, Aug 8 (Reuters) – Novo Nordisk (NOVOb.CO) said on Tuesday a large late-stage study showed its obesity drug Wegovy had a clear medical benefit, in addition to weight loss, boosting the Danish drugmaker’s hopes of moving beyond Wegovy’s image as a lifestyle drug.

In a statement, the Danish drugmaker said the weekly injection reduced the risk of a major cardiovascular event like a stroke by 20% in overweight or obese people with a history of heart disease, exceeding expectations from a key late-stage trial.

That’s significantly better than the 15-17% expected by investors and analysts ahead of the eagerly-awaited data.

The study called SELECT involved 17,500 patients aged 45 years or older with no prior history of diabetes and started almost five years ago testing if the weekly injection has medical benefits.

The news sent shares in Europe’s second-most valuable listed company after LVMH (LVMH.PA) up more than 13% to record highs. The shares have surged almost 150% over the past two years.

The results may help persuade insurers in the United States and cost-conscious health authorities in Europe to cover the cost of Wegovy for a broader segment of patients.

The U.S. Medicare health plan for older Americans, for example, classifies weight-loss treatments as lifestyle drugs.

Experts say the new data could lead the U.S., where Wegovy costs $1,300 a month, to reassess that.

The landmark trial data shows Wegovy has “the potential to change how obesity is regarded and treated,” said Martin Holst Lange, executive vice president for development at Novo Nordisk, in a statement.

Novo Nordisk said it expects to file for regulatory approvals of a label indication expansion for the weekly injection in the United States and European Union this year.

The detailed results from the trial will be presented at a scientific conference later in 2023.

CAUSE A STIR

The increasingly popular drug has transformed the weight-loss market since its U.S. launch in June 2021, capturing the attention of patients, investors and celebrities worldwide and boosting Novo’s shares.

The injection makes patients feel full for longer and leads to an average weight loss of around 15% when combined with changes to diet and exercise. It belongs to a class of drugs known as GLP-1 agonists, originally developed to treat type 2 diabetes.

Over 650 million adults worldwide are obese, more than three times as many as in 1975, and roughly another 1.3 billion are overweight, exacerbating conditions such as heart disease and diabetes, the World Health Organization says.

Sydbank analyst Soren Lontoft Hansen said the better-than-expected results will cause a stir among doctors who prescribe anti-obesity drugs.

“It may also increase the likelihood that payers in certain markets will engage in dialogue regarding Novo also being able to obtain subsidies in some markets,” he said.

In Europe, Wegovy is available in Norway, Denmark and Germany.

The Danish and Norwegian public health authorities have said they could reconsider whether to cover the drug, which they currently do not, once SELECT results were in.

Barclays analysts have estimated a positive outcome from the study could boost uptake of Wegovy by a quarter by 2030 if it gets approval for expanded use.

That could be a mixed blessing because the company is already struggling to meet sky-rocketing U.S. demand.

In May, it said it was halving the supply of starter doses to the U.S. market to ensure supplies for existing patients.

Reporting by Maggie Fick and Nikolaj Skydsgaard;
Editing by Josephine Mason and Sharon Singleton, Kirsten Donovan

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